St. Joseph’s College of Commerce (Autonomous) |
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| End Semester Examinations – March / April 2016 | |||
| M.Com (I.B.) – ii semester | |||
| P415 MC 203: INTERNATIONAL FINANCIAL INSTITUTIONS AND MARKETS | |||
| Duration: 3 Hours Max. Marks: 100 | |||
| SECTION – A | |||
| I) | Answer any SEVEN questions. Each carries 5 marks. (7×5=35) | ||
| 1. | A 9% Rs. 100 face value Bond, having a provision for conversion at the end of 5 years into four equity shares of face value Rs. 10 each at a premium of Rs. 15 each. It is expected that the equity shares will have market value of Rs. 33 per share on the date of conversion. An investor has expected rate of return of 15% per annum: suggest him at what price he should be ready to buy this Bond. | ||
| 2. | Write a short note on repo and reverse repo? | ||
| 3. | What are the types of derivatives that are used in the Forex Market? | ||
| 4. | Write short notes on ECB and FCCB? | ||
| 5. | Write a brief note on SWIFT. | ||
| 6. | What is FRA? | ||
| 7. | If exchange rates in Mumbai interbank market and London market are as follows:
Interbank Mumbai USD 1 = Rs. 41.2550/41.2650 London Market GBP 1= USD 1.6520/1.6527, At what rate can an importer buy GBP 1 against rupees? |
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| 8. | Explain the role and function of IMF? | ||
| 9. | Explain the following Terms: a. Direct quote b. Indirect quote
c. Bid Rate d. Ask rate e. Spread |
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| 10. | The current bank interest rate of US and India are 4.5% and 8.5% respectively. The present spot market rate of exchange in 1 US $ is Rs. 45.36. What would be the twelve months forward rate? | ||
| SECTION – B | |||
| II) | Answer any THREE questions. Each carries 15 marks. (3×15=45) | ||
| 11. | Explain the types of Bonds that are offered by international bond market. | ||
| 12. | Explain the types of international payment /settlement system. | ||
| 13. | What is ADR and GDR? Differentiate between them. | ||
| 14. | ICICI has issued 9% Bonds @ par value of Rs.1000 each and redeemed at a premium of 10% after 10 years from the date issue. The prevailing inflation rate is 8%. Calculate the duration of bond? | ||
| 15. | What is meant by securitization? Explain the process/mechanism of securitization | ||
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SECTION – C |
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| III) | Case Study – Compulsory question. (1×20=20) | ||
| 16. | Futures Long and Short Positions.
For a Future contract in Canadian Dollar, the initial margin prescribed by the exchange is USD 5,000. A contract is concluded at a price of USD 0.75. The settlement price in the exchange at end of Five subsequent days are as follows: Day 1 USD 0.745 Day 2 USD 0.750 Day 3 USD 0.760 Day 4 USD 0.745 Day 5 USD 0.760 At the end of each day, the margin accounts of both the buyer and seller will be adjusted based on the settlement price for the day where the margin goes below the initial level, the buyer/ seller will be required to reimburse to bring the balance to the initial level. If the margin is more than the initial level, the member concerned is free to withdraw the excess. Draw the Table that shows Futures Long and Short Positions and their Net Profit/Loss at end of five subsequent days. |
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